You are about to start a big business. Big in the sense that nobody in your family ever did any business, and you are stepping out on your own for the first time. Obviously on the first day of your business you are Chairman as well as Chaprasee of your company, and it may remain so for some time.
However, you will need to put together a team of financial (and some other) advisers. So say you are in a media sensitive business, and you are planning to sign up many suppliers, clients, service providers across the geography, let’s see what all you need to do.
You will need somebody to tell you whether to form a sole prop, a partnership, limited company, etc. He could be the Chartered Accountant who will tell you what books of accounts to keep, etc. He could be the first member of your team.
If you are going to sign a lot of agreements you will need a lawyer who will also advise you on hiring (employee agreements), vendor agreements, client agreements, how to give a notice to an errant client who is not paying on time, etc. He should be your second opener at the non striking end!
If you are dealing with a lot of people get yourself a RISK or INSURANCE adviser. Over the past 20 years risk has changed a lot. You need a risk specialist – so look for an insurance adviser who understands business risk, employee engagement, health, – the whole works. You could get a tied agent ( say Hdfc Ergo) but this guy is unlikely to know all the products in the market. Never go to such a guy who has a very limited product knowledge.
Personal Financial Adviser – he does to your personal finance what the Chartered Accountant does to your business books. You need a PFA who has infra to support your requirements – like capital gains calculation, switching from debt to equity, or investing in foreign funds, making sure you have adequate personal term insurance, medical insurance, updating your nominations and writing your will.
In case you are in the media world, you may need a PR expert also as a part of your financial team. He/she will help you navigate the sensitive media world – and you could get hurt if you did not handle that well.
A nice mentor who will help you talk to the Angel investor, Venture capitalist, etc. Keeping such a person on the board is useful because the investors will not like talkint to an “agent”.
Use this team to sound out your purchase of assets, hiring of personnel (it is good to ask your lawyer to find you a good accountant who will also have the approval of the CA). Don’t ever talk to a new potential shareholder without the mentor, CA or lawyer along with you.
How much money to raise in Round 1, Round 2, etc. should be thought out very well before you initiate talks with outsiders. This is the team with whom you will have the preliminary discussions.
You need to understand the value of the core team, and then spend enormous amount of time in selecting them. Remember it is easy to get rid of your Chief Accountant but you can’t get rid of your Statutory auditor so easily.
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